-63-
that contribution to Schutt I and II engendered no meaningful
change in decedent’s relationship to the assets.
Again, however, this reasoning disregards unique factual
circumstances present in this case that were not involved in
Estate of Harper v. Commissioner, supra, and its progeny.
Undoubtedly, looking in isolation at the relationship of a
decedent to his or her assets may be sufficient where the
decedent’s contributions make up the bulk of the property held by
the relevant entity and no suggestion of any benefit beyond
change in form is evident. Yet here, where others contributed
more than half of the property funding the entities and the
record reflects that decedent used his own assets primarily to
alter his relationship vis-a-vis those other assets, the analysis
must look more broadly at the transactions. In that decedent
employed his capital to achieve a legitimate nontax purpose, the
Court cannot conclude that he merely recycled his shareholdings.
Furthermore, with respect to the additional criteria cited
in Estate of Bongard v. Commissioner, supra at ___ (slip op. at
48-49), each participant in Schutt I and II received an interest
proportionate in value to its respective contribution, the
capital contributions made were properly credited to each
transferor’s capital account, and distributions required a
negative adjustment in the distributee’s capital account.
Liquidating distributions would also be made in accordance with
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